SALT LAKE CITY -- Utah's estimated revenues from taxes and fees increased slightly from November estimates, despite taking into account the effects of looming federal funding cuts, according to information presented to legislators on Monday.
The state's projected surplus is up $5 million from November estimates, to a total of $426 million in additional revenue.
The February estimates have been updated to include adjustments made to federal taxes in a last-minute deal in early January and the possible impact of the federal spending cuts, which could leave state and local programs with deep holes to fill.
About $85 billion in federal spending cuts could be triggered next month unless leaders in Congress and the White House are able to come to an agreement on a budget standoff. If the March 1 deadline passes, state agencies and programs that depend on federal dollars could be hurting.
The most recent calculations from legislative analysts show Utah may lose $39 million in federal dollars if those cuts take place. Most of the cuts affect federal grants that go toward education, health and human services and transportation programs.
With the federal tax changes and looming cuts taken into account, the new revenue projections show Utah has $264 million to fund ongoing programs, down from $300 million in November.
There's also $161 million for one-time projects, which has increased from $121 million last fall.
That increase in one-time money is mainly due to people selling off assets before the end of last year in anticipation of changing federal tax rates, legislative leaders said.
Lawmakers haven't planned to use any money to plug holes caused by federal cuts because they don't know what kind of deal will be worked out in Washington, D.C., said Sen. Lyle Hillyard, the Utah Senate's budget chairman.
The Logan Republican said Utah has enough money to cover state commitments. Anything leftover will be quickly absorbed by state programs and there won't be enough to fill in federal cuts at the state or local level, Hillyard said.
After taking into consideration all those federal impacts, the revenue numbers are better than expected, said House Speaker Rebecca Lockhart, R-Provo.
"It's an indication that the Utah economy is doing quite well," she said.
Lawmakers have not yet begun discussing how to spend the one-time money, but it's possible they'd use it to fund construction on "shovel-ready projects" such as a new classroom building at Utah Valley University and a new juvenile court in Ogden, Lockhart said.
Legislative leaders will use the new projections when they meet Tuesday and Wednesday to focus on requests for state agencies. They expect to have the budget finalized before the Legislature adjourns on March 14.
Gov. Gary Herbert issued a statement Monday saying the state's finances are strong, unemployment is down and the economy is growing, but the budget standoff in Washington, D.C. is having a "chilling effect" on Utah's recovery.
"We would be seeing even greater growth were it not for the backdrop of federal uncertainty and a fragile national economic recovery," he said. "It's good news that the state economy is largely resilient, but we are not immune to national economic dynamics."